A new economic analysis says Canada is a land becoming more and more divided between the prosperous West, blessed by its natural resources, and everyone else.
The Bank of Montreal says the two western provinces of Alberta and Saskatchewan will lead the rest of Canada in economic growth this year and next by a wide margin.
The BMO report predicts the two provinces will both record three per cent or more economic growth this year — about one point higher than the national average — and again in 2012.
The report says Ontario and Quebec and the four Atlantic provinces will likely struggle with sub-two per cent growth next year as government austerity and export challenges due to the high dollar weigh on their economies.
On average, Canada’s economy is expected to continue with moderate growth of two per cent in 2012 — not strong but not a disaster given the weak U.S. economy, Europe’s debt crisis and the slowdown in emerging markets.
The western provinces’ benefits are natural resources, which are still much in demand across the world.
The bank notes that despite this year’s temporary disruption due to wildfires, Alberta oil production increased by an annual 7.8% through August, with bitumen production up 10.8%.
Saskatchewan has the added benefit of potash, which was up a whopping 25% annually through September this year.
The booming sector helped push the average unemployment rate in Saskatchewan down to an average of 4.9% this year, and weekly earnings up almost five per cent.